STANDSTILL AGREEMENT OF OCTOBER 26 , 2003, BETWEEN
-
FIAT S.p.A. AND GENERAL MOTORS CORPORATION
Agreement dated as of October 26, 2003 (this "Agreement"), between Fiat S.p.A.,
an Italian corporation ("Fiat"), and General Motors Corporation, a Delaware
corporation ("General Motors").
WHEREAS, Fiat and General Motors are parties to the Master Agreement between
Fiat and General Motors dated as of March 13, 2000, and amended as of July 24,
2000, and October 26, 2003 (the "Master Agreement");
WHEREAS, pursuant to the Master Agreement, Fiat and General Motors have also
entered into various agreements providing for a broad strategic alliance,
including the Powertrain JV (as defined in the Master Agreement) and the
Purchasing JV (as defined in the Master Agreement);
WHEREAS, Fiat (or its subsidiaries) entered into agreements for the sale of
certain assets of the financing business of Fiat Auto Holdings B.V. ("FAH") or
its subsidiaries (collectively, the "Fidis Transaction");
WHEREAS, at a meeting of the shareholders of FAH held on April 23, 2003, through
the vote of the majority shareholder of FAH, a (euro)5 billion capital increase
of FAH was approved (the "Recapitalization");
WHEREAS, General Motors regards the Fidis Transaction to be a material breach of
Section 6.10(a) of the Master Agreement and the Recapitalization to be a
material breach of Section 6.10(b)(iv) of the Master Agreement (collectively,
the "Disputes");
WHEREAS, General Motors regards the Fidis Transaction and the Recapitalization
to be prejudicial to General Motors, particularly in the event Fiat were to
later seek to utilize the Master Agreement to exercise its Put Option (as
provided for in Section 8.03 of the Master Agreement), and General Motors
believes it has the legal right to terminate the Master Agreement at this time;
WHEREAS, Fiat contends that the Fidis Transaction and the Recapitalization were
wholly proper and not violative of any of General Motors' rights;
WHEREAS, Fiat disagrees with and rejects General Motors' legal positions and
contends that neither the Fidis Transaction nor the Recapitalization constitute
breaches of the Master Agreement and that General Motors has no legal basis for
terminating the Master Agreement;
WHEREAS, both Fiat and General Motors desire to continue their business
relationship while at the same time preserving their current legal claims and
defenses related to the Disputes; and
WHEREAS, both Fiat and General Motors have determined that the course that best
protects each company's respective interests is to enter into this Agreement in
order to preserve fully their respective claims and defenses related to the
Disputes, and concurrently with the execution of this Agreement to enter into
the amendment to the Master Agreement of even date herewith (the "Amendment")
providing for, among other things, the postponement of the Put Period (as
defined in the Master Agreement);
NOW THEREFORE, in consideration of the following mutual covenants and
agreements, the parties (on their behalf and on behalf of their respective
subsidiaries) agree and intend to be legally bound as follows:
1. Subject to the other provisions of this Agreement, the parties agree
that between the date of this Agreement and December 15, 2004 (the
"Standstill Period") neither party (nor any of its respective
subsidiaries) shall exercise any remedy (including seeking resolution
of a dispute under Section 10.08 of the Master Agreement) or initiate
any litigation, action, complaint or other legal proceeding relating to
(a) the Disputes and any actions related to the Fidis Transaction or
the Recapitalization (including any closings or follow-on actions that
occur after the date hereof in connection with consummating the Fidis
Transaction and any subsequent subscription by Fiat or its affiliates
to the FAH capital increase approved on April 23, 2003 and the
subsequent use of any proceeds of such subscription) or (b) the Master
Agreement arising out of or in connection with any event, circumstance
or omission existing on or occurring on or prior to the date hereof.
2. The parties agree that each party shall fully preserve and retain its
respective rights, claims, and defenses (a) as they existed on June 30,
2003 related to the Disputes and (b) as they exist on the date hereof
related to any other event, circumstance or omission existing on or
occurring on or prior to the date hereof (collectively "Other Events").
The parties' positions with respect to the Disputes and the Other
Events shall not be affected or prejudiced (including by arguments of
waiver, laches, or excuse) by the subsequent passage of time or
continued pursuit of the business relationship established by the
Master Agreement, including acceptance of benefits thereunder by such
party. In so agreeing, neither party, with respect to the Disputes or
the Other Events, (a) concedes the validity of any claim or defense
asserted by the other party or (b) shall be prejudiced in any manner in
any legal proceeding, or be subject to any argument that it has elected
any remedy or has waived any of its rights, or otherwise has been
prejudiced respecting its claims or defenses, by virtue of entering
into this Agreement.
3. The parties each specifically recognize and agree that, in addition to any
other remedy at law or equity to which the parties may be entitled,
injunctive relief is an available remedy for breach of the terms of this
Agreement.
4. In the event Fiat delivers a written notice to General Motors pursuant to
Section 2.1 of the Amendment, the Standstill Period shall terminate
effective as of the date of the actual receipt of such notice by General
Motors.
5. The parties further agree that Section 6.07 of the Master Agreement
applies to this Agreement and the subject matter of this Agreement.
6. The parties agree that Sections 1.03, 10.02 (as in effect on the date
hereof), 10.03, 10.07, 10.08, 10.09, 10.10 and 10.11 of the Master
Agreement shall apply mutatis mutandis to this Agreement.
7. Except as specifically provided in the Amendment, neither this Agreement
nor the Amendment amends or supersedes the Master Agreement, the Joint
Venture agreements, or any other written agreement between the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first written above by their duly authorized officers.
FIAT S.p.A.
By:
------------------------------------
Name: Bruno L. Cova
Title: Senior Vice President and
General Counsel
GENERAL MOTORS CORPORATION
By:
------------------------------------
Name: Thomas A.Gottschalk
Title: ExecutiveVice President -
Law and Public Policy